Microsoft cloud licensing complaints are a set of competition complaints, regulatory investigations and a damages claim about the terms on which Microsoft licenses Windows Server, SQL Server and other software for use on cloud platforms that compete with Microsoft Azure. The central issue is Microsoft’s “Listed Providers” category: Alibaba, Amazon, Google and Microsoft itself. Customers’ bring-your-own-licence (BYOL) rights on those providers’ infrastructure are narrower than on Azure or on other hosters.[5]
As of 2026-09-30, no court or competition authority has found that Microsoft infringed competition law in respect of these practices. The UK Competition and Markets Authority (CMA) found in a market investigation that the practices have an adverse effect on competition, which is a different legal test.[4] A UK collective damages claim is pending.[8]
Background
According to the CMA’s final report, before October 2019 customers with perpetual on-premises licences could generally use them on dedicated hardware at any cloud provider. In 2019 Microsoft created the Listed Provider category, and customers of Listed Providers could no longer use pre-existing licences on a BYOL basis on those providers’ dedicated hardware.[5] The CMA recorded Microsoft’s explanation that the change corrected a “licensing loophole”, in which AWS and Google used customers’ outsourcing rights to create what was in effect a public cloud service on dedicated hardware. It also recorded that smaller providers were not covered because their offering was closer to that of a genuine outsourcing partner.[5]
The CMA report states that in the summer of 2021 Aruba, OVHcloud and the Danish Cloud Community complained to the European Commission about higher prices and more licensing restrictions for their customers than for Azure customers.[5] On 18 May 2022 Microsoft announced changes to its outsourcing and hosting terms. These included a Software Assurance and subscription benefit allowing customers to run their software on any cloud provider that is not a Listed Provider, on dedicated or shared servers. Microsoft said these changes “don’t apply to Listed Providers”.[1] The CMA records that the changes took effect on 1 October 2022 and included the Flexible Virtualization Benefit. It also records that, from 1 October 2025, customers can no longer buy and deploy Microsoft licences from independent managed service providers that host on Listed Providers’ clouds.[5] The current rules are described in Microsoft licensing on third-party clouds.
The complaints and claims
CISPE complaint to the European Commission (2022-2024)
On 9 November 2022 Cloud Infrastructure Service Providers in Europe (CISPE) filed a formal competition complaint against Microsoft with the Commission’s Directorate-General for Competition. CISPE said it supported a separate complaint already filed by its members OVHcloud and Aruba.[2] CISPE alleged that the contractual terms Microsoft introduced on 1 October 2022 “add new unfair practices”, and it asked the Commission to open a formal investigation.[2] Microsoft’s position, as recorded by the CMA, was that it disagreed with the earlier European complaint. Microsoft told the CMA that its 2022 changes “comprehensively resolved the concerns of all but the largest hyperscale cloud providers”, and that the Aruba, OVHcloud and Danish Cloud Community complaint had been withdrawn.[5]
On 11 July 2024, according to CISPE, the parties signed a Memorandum of Understanding. Under it, Microsoft committed to changes including an “Azure Stack HCI for Hosters” product for European cloud providers, and CISPE agreed to withdraw its complaint and not to initiate or support complaints on these issues. CISPE said Microsoft had nine months to deliver, failing which it would refile. It also said Microsoft would pay a lump-sum contribution towards CISPE’s costs. CISPE stated that AWS, Google Cloud Platform and Alibaba Cloud would “neither benefit from nor be bound by these terms”.[3] The amount of the payment has not been published. No Commission decision on the CISPE complaint was found in the official sources reviewed for this article.
CMA cloud services market investigation
The CMA published the final decision of its market investigation into cloud infrastructure services on 31 July 2025.[4] It found that “Microsoft does not make certain products available to AWS and Google through their licensing agreements, and customers with existing licences cannot bring these to AWS and Google in most instances”. It also found that certain products are used disproportionately on Azure, “at least partly because some customers’ choice of cloud is influenced by Microsoft’s licensing practices”.[4] The CMA concluded that the licensing practices reduce competition in cloud services by adversely affecting the competitiveness of AWS and Google, which “gives rise to an AEC [adverse effect on competition] in cloud services in the UK”.[4] The relevant products it named are Windows Server, SQL Server, Windows 10/11, Visual Studio and the productivity suites.[4]
The CMA did not impose remedies itself. It recommended that the CMA Board prioritise strategic market status (SMS) investigations under the Digital Markets, Competition and Consumers Act 2024 into Microsoft and AWS.[4] The final report records Microsoft’s submissions disputing the analysis. For example, Microsoft submitted that the Azure Hybrid Benefit discount “is not foreclosure but the essence of competition”, and that Microsoft licence costs were too small a share of AWS’s and Google’s revenues to cause foreclosure.[5]
On 31 March 2026 the CMA announced that it would open an SMS investigation into Microsoft’s business software ecosystem. It said an SMS designation “would allow the CMA to act on a major concern from the CMA’s cloud market investigation – Microsoft’s use of software licensing reducing competition in cloud”.[6] The investigation was launched on 14 May 2026, with a designation decision due by February 2027. The CMA noted that “SMS designation does not assume wrongdoing”.[7]
Stasi v Microsoft (Competition Appeal Tribunal)
On 3 December 2024 Dr Maria Luisa Stasi applied to the Competition Appeal Tribunal (CAT) for a collective proceedings order against Microsoft Corporation, Microsoft Limited and Microsoft Ireland Operations Limited. The claim is on behalf of UK organisations that obtained a licence to use Windows Server from Amazon Web Services, Google Cloud Platform or Alibaba Cloud (the “Listed Providers”).[9] The claimant alleges two abuses of a dominant position. These are allegations that have not been tried:[9]
- a “SPLA Pricing Abuse”: charging higher wholesale prices for Windows Server under Service Provider License Agreements than for equivalent licences to Azure users;
- a “Re-Licensing Abuse”: allowing holders of on-premises Windows Server licences to run them on Azure, but not on a Listed Provider, without paying re-licensing fees.
The claim form estimates aggregate damages of between about £1.7 billion and £2.1 billion.[9] Microsoft opposed certification. It argued that there was no adequate blueprint to trial, raised concerns about funding and governance, and, by the hearing, argued in the alternative for hybrid opt-in and opt-out proceedings.[10]
Decisions and outcomes to date
- Certification. On 21 April 2026 the CAT held that the authorisation and eligibility conditions were met and certified the claim on an opt-out basis ([2026] CAT 34).[10] Certification is not a finding on the merits.
- Permission to appeal. On 20 May 2026 the Tribunal refused Microsoft permission to appeal. It explained that it had relied on the CMA’s final report “only as an indicator of the evidence likely to be available at trial”. It ordered Microsoft’s Defence by 11 September 2026.[11] The CAT’s case page states that the application has been renewed before the Court of Appeal and that a case management conference is listed for 4 December 2026.[8]
- European Commission. On 18 November 2025 the Commission opened Digital Markets Act market investigations into whether Amazon Web Services and Microsoft Azure should be designated as gatekeepers. A third investigation covers practices in the cloud sector such as “tying and bundling services, and potentially imbalanced contractual terms”.[12] On 25 June 2026 the Commission informed both companies of its preliminary view that they should be designated. It added that “preliminary findings do not prejudge the outcome of an investigation”.[13] The Commission’s releases do not single out Microsoft’s software licensing terms.
Significance for software licensing and SAM practice
- The Listed Provider rule remains the contractual baseline. None of the matters above has changed the Product Terms by order. Rights to run Microsoft software on AWS, Google Cloud or Alibaba Cloud still depend on the current Product Terms, License Mobility through Software Assurance and the Listed Provider restrictions. These are covered in Microsoft licensing on third-party clouds.[1]
- Changes have come from Microsoft, not from orders. The 2022 hosting changes and the 2024 CISPE arrangement were announced by Microsoft or by the parties, not imposed by a regulator.[1][3] The CMA has said that SMS designation could lead to conduct requirements on licensing, but no such requirements exist as of 2026-09-30.[7]
- Dated rules matter. The CMA’s timeline shows that BYOL rights for the same licence changed on 1 October 2019, 1 October 2022 and 1 October 2025.[5] An effective license position for cloud workloads should record which version of the terms applied when each licence was acquired and deployed.
- Pending outcomes. The Stasi claim, the CMA SMS investigation and the Commission DMA investigations were all unresolved as of 2026-09-30.[8][7][13]
Lessons learned
- Keep a dated record of the terms. The CMA’s timeline shows that bring-your-own-licence rights for the same licence changed on 1 October 2019, 1 October 2022 and 1 October 2025.[5] An effective license position for cloud workloads should note which version of the terms applied when each licence was acquired and deployed.
- Check the Listed Provider rules before migrating. Rights to run Microsoft software on AWS, Google Cloud or Alibaba Cloud still depend on the current Product Terms, License Mobility through Software Assurance and the Listed Provider restrictions.[1] These should be reviewed before workloads move to those clouds.
- Findings are not orders. The 2022 hosting changes and the 2024 CISPE arrangement came from Microsoft or the parties, not from a regulator, and no conduct requirements on licensing existed as of 2026-09-30.[3][7] Licence positions should follow the contract terms in force, not the expected result of an investigation.
- Watch the pending proceedings. The Stasi claim, the CMA SMS investigation and the Commission DMA investigations were all unresolved as of 2026-09-30.[8][7][13] Their outcomes may change the terms available for cloud deployments.